no title

Medicare projection is wishful thinking

Letters Policy

The Dispatch welcomes letters to the editor from readers. Typed letters of 200 words or
fewer are preferred; all might be edited. Each letter must include name, home address and daytime
phone number.
Dispatch.com also posts letters that don't make it to print in
The Dispatch.

FAX

Also in Opinion

Subscribe to The Dispatch

Already a subscriber?
Enroll in EZPay and get a free gift!
Enroll now.

Saturday August 16, 2014 7:14 AM

It was greeted as great news that the Medicare trust fund has moved its projected bankruptcy out
four years, from 2026 to 2030, according to the annual report by its trustees released on July 28 (“
Medicare’s solvency extended by 4 years,” Associated Press article, July 29
Dispatch).

I wondered: Is this news too good to be true? It is very unusual that such an actuarial study
would change that quickly. Some major assumption must have been altered.

From reviewing the report, I saw that the change that led to the more-optimistic estimate was
the assumption that the low level of health-care inflation, noted in the past couple years, would
continue to occur in the near term.

With these words on Page 3 of the report, this is what the trustees assumed: “The Trustees are
hopeful that U.S. health care practices are in the process of becoming more efficient as providers
anticipate a future in which the rapid cost growth rates of previous decades, in both the public
and private sectors, do not return.

“Indeed, the Trustees have revised down their projections for near term Medicare expenditure
growth in response to the recent favorable experience.”

The trustees are “hopeful,” and because of that, they make such a drastic change in their
projections about the health of our Medicare program? Wow, hope is an amazingly rational basis for
changing an estimate.

Also troubling is that the report was released two months later than last year’s report and that
the physician-reimbursement cuts, contained in the law but always overridden by Congress, are
included in the estimates at full value.

One might surmise that the report was delayed for months and the physician cost-savings were
included because the assumption change about the lower health-care costs would have moved the
bankruptcy date out much too far, making it much more likely to draw attention and to be greeted
with much more-profound skepticism.

One would hope the president and Congress would put their energies into fixing Medicare as well
as Social Security retirement and disability benefits, rather than spending their time offering
false estimates.

These programs need to be shored up now and preserved for future generations.